Company Doctor: Is Pinkberry a fad or a trend?

In recent months, there have been a series of tremors felt all over Los Angeles, and they were not from an earthquake. They were caused by stampedes of customers heading in droves into a new purveyor of a unique frozen dessert called Pinkberry.

Neighborhoods have been invaded by individuals who wait in line for up to an hour to taste this mysterious frozen delight. Police are writing tickets at a fever pace, trying to stem the rising tide of customers blocking traffic and driveways in normally quiet neighborhoods.

Why is this happening? Is this a trend or a fad? How could two young Korean entrepreneurs with no background in the food business have the hottest product in the soft ice cream industry?

We just returned from a trip to Santa Monica, Calif., where my daughter pleaded with me and my wife to visit a Pinkberry. I was aware of Pinkberry because American Express has featured them in recent ads for their new exclusive Plum Card. As someone who managed a Carvel ice soft cream store during my college years, I was curious as to what the “deal” was with this product.

I found myself waiting in line in a cramped storefront where mothers and sons, fathers and daughters were pressed up against the showcases, salivating over the fruit and topping options for their frozen treat. I opted for a fruit smoothie, while my daughter and wife selected cups of fresh fruit and frozen yogurt. We were each swept away to a special place by the taste of citrus blended with the sweetness of the fresh fruit. This treat was not inexpensive. A cup of fruit and citrus yogurt is a little less than $5.

So what made this concept so successful so quickly?

Pinkberry offers a wide selection of fresh fruit and exotic toppings, combined with their frozen citrus yogurt. Their locations are peppered in local communities in small stores on main streets, where people wait in line for a chance to pick up their treat. Some locations have security guards whose assignment is to keep the lines orderly and to shut down the business on a timely basis.

Their stores are brightly painted in citrus and fruit colors and have limited seating. Each order is personalized with a computerized strip that details your order and is placed on the side of your cup. You are greeted with “Welcome to Pinkberry” and “How can I help you?” by the clerk at the register. In this compact store, two workers scurry to fill your request by scooping your toppings on to the frozen citrus swirl. You are in and out in a matter of moments.

I was so excited about tasting this treat, that I froze the back of my head. That has not happened since I was 8 years old. After I regained control over my brain waves, I began to evaluate my experience and the product. I was trying to understand why this product offering was causing so much excitement among adults and children.

Let’s apply Phillip Kotler’s 4P analysis to better understand what is happening at Pinkberry.

Price: It was not the price. I did not observe any price resistance at the Santa Monica Pinkberry. Mothers were buying cups of the citrus delight for their preteen children and one for themselves. At almost $5 per serving, most sales were easily over $20. In many cases, the transactions were put on a credit card. Upscale vehicles were lined up around the store.

Promotion: Besides the American Express commercials, I did not see any promotion for the Pinkberry chain on local television or in the L.A. Times. It appears to be a wave of “word of mouth” advertising and local editorials that are creating the excitement over this swirled sweet delight. I discovered that the local gossip bloggers were touting the exotic taste of Pinkberry which further fueled the frenzy. In fact, on the “Ellen” show during the second week of January, Ellen DeGeneres treated her audience of 600 to a cup of Pinkberry. She publicly endorsed the product by touting its unique flavor on national television. What more could a company ask for from a satisfied customer?

Place: It is not uncommon to find a Pinkberry next to a Starbucks. The customer profile is very similar and Pinkberry’s product appears to be an extension of the sweet coffee-based drinks offered by Starbucks. The owners of Pinkberry have received funding from the Starbucks foundation and have opened up stores in New York City. The open question is, will Pinkberry find a home outside the affluent suburbs of Los Angeles or disappear in the near future and join the hula hoop and pet rock in the annuls of business fads?

Product: The unique tart taste of the Pinkberry yogurt was enhanced by the assortment of fresh fruits and other toppings, including chocolate chips. Anyone you talked to reflected on the citrus taste of the yogurt. It appears that the product is actually habit forming. Once you have tasted it, you desire more. There was never a mention of the premium price among the customers I spoke with that day. Already there are copycat businesses opening up all over Los Angeles offering similar product lines and assortment of toppings.

Will this fad turn into a trend? Will customers continue to support this premium yogurt product during this period of economic turbulence? This level of success brings in competition, and only time will tell if Pinkberry is unique enough to survive the onslaught of imitators.

If we look at Starbucks, the premium coffee purveyor, they have recently experienced a downturn in sales and their founder has again taken the reigns of management. Pinkberry’s success is almost counter-intuitive. It is my opinion that Pinkberry will need to add to their product portfolio to maintain its current growth pattern. Starbucks has continually added new varieties of coffee, muffins, scones, special lattes, salads, sandwiches and sweetened drinks to keep their customers coming back.

We will have to wait to see if this Pinkberry craze finds its way to the Midwest and to Milwaukee. The first indication that the invasion has started will be scores of cars doubled-parked on Downer or Brady Street and lines outside a store painted in fruity pastels. Will Milwaukee’s custard monopoly be scooped? Only time will tell. 

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